August 16, 2013

Policy Issues in the Music Industry: Public Performance Rights for Sound Recordings

At its core, the music industry is built on the legal right to own and/or control copyrights, the intellectual property that is created when someone writes or records a song. These two versions of a song, the melody and lyrics you can sing while walking down the street and the audio recording you actually listen to on your iPod, each represent a separate copyright and a separate source of potential income. For example, let's look at Bob Dylan's classic song "Make You Feel My Love." This song, though written by Dylan and initially performed by him, has become an international hit in various genres on numerous occasions through popular recordings done by artists such as Billy Joel, Garth Brooks, Kelly Clarkson, and, most recently, Adele. Most music fans would agree that each new performance of this song brings a unique perspective to it and perhaps helps a new generation of music listeners rediscover this iconic piece. Adele's version was a world-wide hit that sold enough copies to be certified Gold in the Unites States and Platinum in the United Kingdom. Since this song was written by Bob Dylan and performed by Adele, each time a copy of this version of this song is sold, both musicians receive payment for their respective contribution as the songwriter and the performer. Additionally, when this same song is played on Internet, cable, or satellite radio stations, both Adele and Bob Dylan will earn money. Still, despite the nuances of Adele's hit performance of this song, did you know that when her version is broadcast on terrestrial radio (AM and FM stations) in America, she does not actually earn anything for it? 

America is one of very few westernized countries which does not offer public performance copyright in a sound recording by paying royalties for broadcasting it on the radio.  This public performance right only exists when a sound recording is played on Internet, satellite, or cable-based radio stations, a fact that has given traditional radio a distinct economic advantage over their digital counterparts. However, this does not just affect household names like Adele. It means that every session musician, producer, engineer, and vocalist who works on a song that is played on the radio cannot be compensated for the use of their work. 

A Brief History of Performance Rights
1787- The US Constitution grants congress the ability "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." in Article 1, Section 8, Clause 8, thereby establishing the precedent for copyright and patent laws. 

1971- The Sound Recordings Act of 1971 amends the Copyright Act to include sound recordings in the list of works that receive protection. However, this does not include public performance rights, only reproduction, adaptation, and distribution. 

1976- The Copyright Act of 1976 becomes the basis for modern copyright laws and amends the previous act of 1909. It grants five exclusive rights to copyright holders including the rights to reproduce, create derivative works, distribute, perform publicly, and display their copyrighted work.

1995- The Digital Performance Right in Sound Recordings Act of 1995 grants owners of sound recording copyrights the exclusive right "to perform the copyrighted work publicly by means of a digital audio transmission." This establishes the public performance right for sound recordings but fails to include traditional, terrestrial radio. As a result, only Internet, satellite, and cable stations must pay. According to the Future of Music Coalition, "This arrangement is the result of a long-standing argument made by terrestrial broadcasters that performers and labels benefit from the free promotion received through radio play. Broadcasters contend that airplay increases album sales, which leads to compensation for performers and record labels." Foreign countries, however, do provide this right but since it is not reciprocated in America, foreign performing rights organizations (similar to ASCAP, SESAC, or BMI) cannot distribute the royalties Americans are earning abroad. 

2009- The Performance Rights Act (H.R. 848 and S. 379) is introduced to Congress in an attempt to expand the public performance right for sound recordings to include terrestrial radio stations. Additionally, it would create a sliding pay-scale so lower-revenue radio stations would not pay as much. In both the House and the Senate, the bill makes it out of committee but does not come to a vote. 

2012- Clear Channel Communications makes a landmark deal with Big Machine Label Group to pay its artists a percent of revenue earned from radio broadcasts, marking the first time this will happen in the United States. 

2012- In a step backwards, Pandora, arguing that terrestrial radio does not pay for public performance, lobbies congress to pass the Internet Radio Fairness Act (I will address this in a separate post because understanding IRFA first requires knowledge of performance rights). This would change the way royalties are determined for Internet airplay and significantly decrease royalties earned by artists when their music is played online. As part of a Congressional Hearing on this bill, Jimmy Jam testifies on behalf of the music community and reemphasizes the need for a public performance right for sound recordings on traditional radio. The bill does not succeed, however it is likely to be reintroduced in the near future.  

What You Can Do:
  • Contact your representatives using this online tool. Tell them you support performance rights for sound recordings and ask that they support bills like the Performance Rights Act and oppose those like the Internet Radio Fairness Act. 
  • Get involved by participating in GRAMMYs on the Hill
  • Learn more by visiting Future of Music Coalition Fact Sheet and musicFIRST Fact Sheet
  • Keep in mind, if you intend to work in radio, this is a heated issue that those in the broadcasting side of entertainment may not support. However, in recent years, negotiations between both sides and the deal between Clear Channel and Big Machine seem to suggest a compromise is possible.
  • Stay educated by keeping up with industry news and following music policy and law issues
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